Natural Gas in the Upper Peninsula

September 23, 2015

Topics

Who is SEMCO

Growth

Efficiency

Monthly Assistance Program

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SEMCO ENERGYin Michigan• 298,000 Customers

• 41 BCF of Gas Sold or Transported

• Approximately 6,000 miles of distribution main

• 255 Cities, Towns and Villages Served

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SEMCO ENERGY in the Upper Peninsula• 38,000 Customers

• 6.7 BCF of Gas Sold or Transported

• Approximately 772 miles of distribution main

• 57 Cities, Towns and Villages Served

How SEMCO approaches growth (GIS Approach)

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On and Near Existing Facilities

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Expansion Project Identification

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2013 Keweenaw Expansion Project

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81,500 feet of gas main

700 Potential Customers

360 Customers in first year

Three new franchises

Allouez

Ahmeek

Copper City

Expansion Process

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• Requested by a potential customer or identified by SEMCO.

• SEMCO conducts an area assessment

• A formal financial model is performed in accordance with the Customer Attachment Program (CAP) model. • SEMCO pays for a portion of the costs and the remaining costs

are paid by the new customers.

• The costs can be paid over time, typically 5 years, as part of the customer’s bill or may be paid up front.

CLEAResult

Michigan Community

Action

Morgan Marketing Partners

DNV GL

MECA

Energy Pioneer

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How SEMCO approaches EfficiencyCollaboration

Efficiency Programs Residential

Appliance Rebates

Energy Audits

Home Envelope Programs

Education Programs

Income Qualified Programs

Non-Residential Programs

Rebates

Energy Profiles

Commercial Education Programs

Customer Designed Efficiency Measures

Pilot Programs

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Customer Efficiency Results in the Upper Peninsula (2012-2015)

Direct EfficiencyIncentives

Participants Annual Therm Savings

EstimatedAnnual Customer Savings

Residential $1,415,000 5,063 730,900 $406,000

Non-Residential

$643,500 41 1,251,000 $696,000

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• Monthly Assistance Program (MAP) is funded by MEAP

• MAP provides a reduced monthly budget• Promotes self-sufficiency by rewarding on-time bill payments • Monthly credits based on income and consumption levels• Reduces customer non-pay disconnects• Encourages energy conservation

Upper Peninsula Customers• Enrollments increased 72% from previous year

• 253 natural gas• 54 propane

• Average energy subsidy reduced by $55 per household , or 11%, in 2015 compared to 2014

• 22% of enrollments are senior citizens• In addition, Home Heating Credits increased by

nearly 18% during the same time period.

Monthly Assistance Program (MAP)

Natural Gas in the Upper PeninsulaAdvantages

Affordable

Expanding use

Domestically produced

Low emissions

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UP Status

Abundant supply in southern UP

Limited firm capacity in the northwest UP

Controlled service rules governing new industrial and commercial retail sales customers since January 2009

Investing in the Upper Peninsula